Galam increases fructose prices
The company, which supplies its branded ingredient Fruitose across globe, said it will be hiking prices when renewing contracts for 2011 as it is faced with higher sugar, fuel and freight costs.
Marcello Messina, managing director for Galam Europe told FoodNavigator.com that no specific percentage increase has as yet been established due to differences by region and by customer. However, he indicated that the increases are likely to be single-digit.
Price reversal
The hike follows a three-year period of lower fructose market prices, pushed down to around €0.95 - €1/ton from €1.30 - €1.40/ton three years ago. The 30 per cent decrease was a result of greater competition in the market, after UK firm Tate & Lyle entered the classic market for fructose.
Before Tate & Lyle’s entrance, Galam had again raised prices for its fructose by up to 10 per cent in order to meet higher costs. However, when faced with a more competitive market environment, the firm was forced to adjust prices downwards.
“Each year since 2007 there has been a significant decrease in prices for fructose. We did this because we wanted to keep our market share, and the sugar prices at the time allowed us to do it,” said Messina.
Last year, however, sugar prices started to increase, and despite a dip earlier this year, the overall pricing trend is upwards.
“In an environment where the market sugar price could support our decrease we could do it. But now we’re in a situation where we can’t handle the higher costs, so we’re obliged to ask our customers to take on some of these,” said Messina.
Higher natural sweetener demand
This year, the company also says prices are also being impacted by an overall increase in demand for natural sweeteners.
“Upcoming global approval of stevia in Europe will increase demand for other natural sweeteners and particularly for fructose. To this extend, we already face an increased demand in the markets that already approved stevia and this could result in the short term in upward pressure on prices, due to the limited capacities,” said the firm.
Fructose is a natural sweetener derived from sugar or corn that is available in liquid and crystalline form. It can be used in various applications including dairy, beverages and baked goods.
Fructose is particularly appealing to consumers because of its low GI content. The GI measures how quickly certain foods release carbohydrates into the body, which then raise blood glucose levels. High GI foods cause blood sugar levels to rise more rapidly. Therefore, fructose is recommended for people with diabetes mellitus or hypoglycaemia.
Galam claims to have found a way to manufacture fructose crystals with 99.5 per cent purity.
